Ep 21: Be Aware of Bias in Financial Media

The Concept:

We live in an era where everyone has a platform and it’s more profitable to be entertaining than to be informative. That’s led to bias in media and finance is no exception. Let’s take a look at the most common places you’ll find bias and how to make sure you’re getting information that’s accurate for your retirement plan.

Click the timestamps below to skip around to specific topics in the episode.

The Reality of the Matter:

We all want to be informed when it comes to investing and financial planning and it’s important to do the research to get there. But are you keeping a close eye out for bias in the resources you’re using?

Believe it or not, the financial media is not immune from many of the same issues that people are finding in other categories of media these days. There’s greater ratings and revenue in entertaining people rather than informing them. It’s the world we live in now so you need to understand what form these biases come in to protect your portfolio.

That’s the goal for this episode of the Retirement Reality podcast. Mike Kojonen will discuss four different places you can find bias along with some examples of how this can affect your retirement plan. We’ll also spend a little time on the changes from the SECURE Act and what you need to be doing to adjust. And it’ll all wrap up with a listener question.

Let’s get started.

SECURE Act Changes

If you’ve paid attention to any financial news since the end of 2019, you’ve heard about the SECURE Act that took effect on January 1, 2020. This legislation is bringing the most significant changes to retirement accounts in many years and it will be impacting everyone. If you haven’t looked at what effects it will have on your planning, Mike will discuss the Stretch IRA, required minimum distribution age, and more.

[2:06] – In the news: The Stretch IRA is going away as part of the SECURE Act. Here’s what you need to know.  

[4:40] – Why did this change happen? Is it specifically a tax play for the government

Financial Bias

It’s always a good idea to keep yourself up to date with what’s going on in the financial world. But it’s also critical to understand the information you get from the media isn’t completely unbiased. Whether intentional or not, there are plenty of places where bias rears its ugly head. We want to make sure you’re aware of this and know what to be on the look out for.

It’s also important to remember that getting a second opinion on an investment or an idea that you have for your financial plan is a great way to get impartial and honest feedback. That’s what we do here and always welcome ideas from clients and love to discuss ways to improve a retirement plan.

[6:18] – Let’s talk ‘Fake News’

[6:43] – First place to find bias: Sensationalism

[9:17] – Second bias: Paid Placements

[11:18] – Another bias: Wrong Audience

[12:50] – An example of a common investment that doesn’t usually make sense for pre-retirees.

[14:19] – Final bias: An Axe to Grind

Mailbag Time

We open up the mailbag to take a question from a listener that has an old life insurance policy that’s pretty valuable. They don’t feel like it’s needed any longer so the question it what should be done with the policy. This is a great question to ask because there could be ways to repurpose that policy and Mike has a couple ideas to share.

[17:58] – Mailbag Question: I have about $50,000 in cash value in an old life insurance policy. I don’t need it before so should I just cash it out and invest it somewhere else?

[19:30] – There are a couple options for what you could do with that money

Thanks for checking out this episode of the Retirement Reality Podcast. We’ll talk to you again next week.



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